The government hopes that Air India will be listed on the stock exchange within three years after it exits from owning a majority stake in the airline.

A senior government official told BusinessLine the three-year time frame for listing will be spelt out in the documents which will be provided to entities who qualify to put in financial bids for Air India.

“Details of how employees are to be looked after, how long they need to be retained, how long the Air India brand name is to be retained and other details will be spelt out in the documents which will be provided to those whom the government shortlists for putting in financial bids for Air India,” the official said. Industry watchers say that issues connected with Air India’s workforce need clarity as the salaries of employees, how long the new owner will have to keep them and their perks and benefits which the new owner will have to bear will have an impact on the valuation that any interested party makes for the state-owned airline. On the issue of IndiGo deciding not go ahead with its bid for Air India, the official said the airline’s announcement had not come as a surprise to the government. “Its bid was not a serious one,” said a senior government official in response to a question on how the government is viewing the development.

Meanwhile, many in the industry feel that the government’s decision to retain a 24 per cent stake in the airline will be a dampener for those interested in bidding for Air India. The other sore point is the Preliminary Information Memorandum (PIM) gives about 45 days to seal the shareholding pattern. Many feel that this should be extended to between 45 and 60 days between responses to queries by government and the expression of interest. “Negotiations, legal clearances, and board approvals do not happen in two or three weeks,” an industry watcher pointed out.

The government issued the PIM on March 28 and set April 16 as the last date for submission of written queries by interested parties. May 14 has been set as the last date for submitting Expression of Interest in participating in the bidding of Air India and the government hopes to announce the successful winner on May 28.

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